Federal Reports

In 2019, Congress enacted the Payment Integrity Information Act (PIIA) to update required reporting on agencies’ improper payments. PIIA requires agencies to review and identify programs and activities that may be susceptible to significant improper payments, estimate the improper payments rates in agency programs, and report on their actions to reduce and recover those payments. The Inspector General of each agency assesses compliance with these requirements annually.AmeriCorps implemented corrective actions in FY 2022 that improved its compliance with PIIA reporting requirements. The agency met eight of 10 PIIA compliance requirements. Of the two remaining requirements, the agency reported improper payment rates above the ten percent compliance threshold for the Foster Grandparent Program (FGP), Senior Companion Program (SCP), and Retired and Senior Volunteer Program (RSVP). The agency also reported improper payment rates that were not accurate, reliable, or consistent with Office of Management and Budget guidance for AmeriCorps State and National, FGP, SCP, and RSVP. Further, AmeriCorps incorrectly concluded that there was no need to assess the National Service Trust (NST) for improper payments.AmeriCorps grantees did not have sufficient internal controls in place to verify the allowability of payments made with AmeriCorps grant funds, or to maintain documentation to support the allowability of these payments. AmeriCorps noted that the main drivers of improper payments and unknown payments occurred due to issues with eligibility documentation, non-compliance with the National Service Criminal History Check requirement, and policy issues. Also, some grantees did not maintain documentation to support the allowability of the temporary pay allowances paid to volunteers who were unable to serve during the COVID-19 pandemic.Management agreed to include the NST to the list of programs susceptible to improper payments, add additional provisions to its grant terms and conditions that address the root cause of improper payments, and develop and implement actions to reduce the improper payment rates below ten percent for FY 2023.

The Office of Inspector General (OIG) is issuing this management advisory to bring to your attention concerns regarding the return of Paycheck Protection Program (PPP) funds. This issue requires immediate attention and action by the U.S. Small Business Administration (SBA) to ensure it has processes and procedures in place to adequately accept, process, and account for PPP funds returned by borrowers, lenders, and financial institutions. Expedited management action should mitigate the risk of financial loss to taxpayers.Establishing clear and detailed guidance for borrowers, lenders, and financial institutions on how to return PPP funds and implementing a process for SBA to accurately handle and track the returned funds should mitigate the risk of financial loss. SBA should take immediate action to ensure it has processes and procedures in place to adequately accept, process, and account for returned PPP funds.To ensure PPP funds are returned as appropriate, we suggest the Administrator direct the Associate Administrator for the Office of Capital Access to:1. Provide detailed guidance to borrowers on returning PPP funds to lenders if the loan was forgiven or guaranty purchased.2. Provide detailed guidance to lenders on their responsibilities for accepting PPP funds if the loan was forgiven, to include documenting reasons for the return of funds, returning the funds to SBA, conducting a fraud review, reversing forgiveness when appropriate, and handling loans with only a partial return of funds.3. Seek periodic assurance from lenders that all PPP funds returned to lenders have been reported and returned to SBA. The report to SBA should include details on the source of the returned funds.4. Provide detailed guidance to financial institutions that receive PPP fund deposits for borrowers regarding how to return PPP funds if there is suspected fraud or other issues that would warrant returning funds.

Weaknesses in Treasury’sCARES Act Loan Monitoring

The Veterans Health Administration (VHA) established the beneficiary travel program to reimburse veterans and caregivers for travel expenses for approved healthcare appointments. VHA spent over $1.3 billion on this program in fiscal year 2021. Both VA and the Office of Inspector General (OIG) have identified the beneficiary travel program as susceptible to significant improper payments.In September 2016, VA awarded a contract to create a web-based system called the Beneficiary Travel Self-Service System (BTSSS) to automate the travel reimbursement claims process, reduce long-term costs, provide better oversight, and decrease the risk of improper payments. In November 2020, VA started using the new system nationwide. Complaints to the OIG suggested the new system had not been meeting its intended goals, prompting a review of its implementation.Although VHA has made improvements since BTSSS rollout, the OIG found it needs to do more to ensure successful implementation. The Veterans Transportation Program (VTP) office, which oversees the beneficiary travel program, established four goals to measure success. The OIG found that from February 2021 through July 2022 (the review period), BTSSS fell short of all four metrics on increased automated claims adjudication, reduced manual overrides, greater new system usage, and more self-service use.VA concurred with the OIG’s four recommendations. They included that the VTP director determine what system changes are needed to meet auto-adjudication goals and implement them, as well as conduct outreach to users, solicit feedback, and then consider whether system changes are needed to increase self-service portal usage. The OIG also recommended the assistant under secretary for health for operations create an action plan to phase out continued use of the legacy beneficiary travel function and coordinate with the VHA finance office and assess whether duplicate payments were made to veterans requesting travel reimbursement since the new system went live.